Where’s the McUpsell?

I love McDonald’s sausage, egg, and cheese McMuffins. Not only are they tasty, but with 23g of protein and 430 calories they’re a relatively healthy breakfast and keep me full until lunch (1).

My week consists of 2-3 McMuffin stops. I order exactly the same thing in exactly the same way: “I’ll take a sausage, egg, and cheese McMuffin, please.” To my seemingly specific order, the McDonalds employee responds the same way every time:

“Do you want just the muffin, or the meal?”

The question is typically asked in a slightly hesitant tone, almost inferring that my order is the first in history to exclude the obviously desirable meal deal. The thing is… after eating at least 500 McMuffins in my life, I have no clue what a McMuffin meal deal includes. And I only have a vague idea what a McMuffin meal upgrade costs (I’m guessing $1.50). To this I say:

Where’s the McUpsell?

I am a proud owner of McDonalds stock. Yes because of the company’s unbelievable brand value. But I’ll admit – mostly because I love my McMuffins. After owning MCD for a while, I’ve started to recognize a phrase called “same store sales” is a big deal. Most of the time same store sales vary because of the economy or different menu options. Well, here’s my suggestion to McDonalds:

Train your employees to convey what an upgrade cost and the additional value it includes.

By informing customers about a meal deal’s value proposition, I’m guessing there’s a high probability many (including myself) would upgrade. I understand memorizing all possible upgrades isn’t easy. Upselling takes strong product knowledge and the incentive to go above and beyond. But think of the rewards.

The average McDonalds restaurant serves 1584 customers/day who pay approximately $4.75 per order – resulting in annual restaurant sales of $2.7m. (2)

Let’s estimate a strong McUpsell would convert 2% of customers (3) to purchase a meal deal (4). This doesn’t seem like much, but if these 32 customers pay 60% extra for a meal – each restaurant would make an additional $33,300/year in revenues (5). That’s like adding 4 days!

I estimate a McUpsell would increase global revenues by $225m/year (6). This equates to 12% of McDonalds total revenue increase between 2011-12. In addition, because meal deals include higher margin items (fries, drink, etc.) they’re great for profit margin.

I’m guessing there are a variety of industries that would benefit from instilling more of an upsell mentality. Gas stations? Movie theaters? Restaurant servers and car salespeople have been employing the upsell – but then again they’re compensated as a % of revenues.

It’s a difficult task to supply the training and motivation required to instill a McUpsell mentality, but I’m guessing over time the benefits often far outweigh the initial hurdles.

Hi, I'm Andy and this is my blog, hope you enjoy. Feel free to get in touch anytime via Twitter or Linkedin

About Andy

This is the blog of Andy Shannon. I'm an American living in London, investing in and supporting startups with Startupbootcamp. Once in a while I'll have a thought about tech stuff, startups, or rum. When I do I'll write it here more …